service tax credit eligible on commission on sales

[Asked by Guest]

Res. Sir,

we are manufacturer of excisable product. we are paying commission on sales , party has charged bill of commission in which he also charges service tax amount so in this base

can we eligible to take credit of service tax on commission on sales.

pls. provide any reference.

regards,

Manan Pandya

ahmedabad

[YAGAY and SUN]

Dear Manan,

In many Tribunal decisions (upheld by PandH High Court), it was well settled that Cenvat credit of service tax paid on service of Commission Agent is eligible as input service.

However, the well settled issue has been disturbed by decision of Gujarat High Court in CCE v. Cadila Healthcare (2013) 59 VST 386 = 2013 (1) TMI 304 - GUJARAT HIGH COURT where it has been held that service of commission agent is not eligible as input service for purpose of Cenvat credit.

Though the assessee company has filed appeal before Supreme Court, the decision of Gujarat High Court stands, unless stay is granted.

This is for your kind information.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

res. sir,

thank you for your positive reply.

regards,

manan pandya

[Smitesh Desai]

In order to answer your question, you must first ensure that you are correctly calling "sales commission" to the input service. I have noticed that very often the client refers to "Sales Promotion" as "Sales Commission".

[YAGAY and SUN]

Dear Manan,

Please check the factual position on the concerns raised by Mr. Desai that whether it was sales promotion or sales commission involved in this matter and please revert soon.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

res. sir,

i am very cleared for my problem it is sales commission and we are paying that and on this basis can we eligible to take credit of the same of input service paid.

regards,

manan pandya

[YAGAY and SUN]

Dear Manan,

Thanks for the clarification.

We have gone through the settled legal position pertaining to this matter and it is our considered view that CENVAT credit on such services would not be available to you.

Regards

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

thank you sir for your very positive and prompt reply...

regards,

manan pandya

AI Summary

Cenvat credit eligibility on commission agent services challenged after a higher-court ruling, affecting credit claims pending review.
Eligibility of CENVAT credit on commission paid to sales agents is contested: tribunal precedents allowed credit treating commission agent service as an input service, but a High Court decision held commission agent services ineligible for CENVAT credit. An appeal to a higher forum is pending, and factual classification between sales commission and sales promotion is material to any credit claim.